AstraZeneca to pay $440m for UK biotech business

has continued its recent acquisition burst with the purchase of a UK biotech business.

Following August's takeover of US cancer specialist Amplimmune for up to $500m, the pharmaceuticals group is paying up to $440m for privately owned Spirogen, which focuses on technology which could directly target cancer tumours while protecting healthy cells.

Astra's Medimmune division will pay an initial $200m and a further $240m depending on Spirogen's performance. It will also pay $20m for a stake in Swiss-based ADC Therapeutics, which has a licensing agreement with Spirogen. Medimmune executive vice president Dr Bahija Jallal said:

Spirogen was founded in 2001 as a spin-off from a number of institutions including University College London, with partial funding by Cancer Research UK, and was majority owned by Auven Therapeutics, also the major shareholder in ADC.

Astra's shares have added 28p to 3214.5p on news of the deal. Brian White at Shore Capital said:

These are undoubtedly still early days for [Astra] chief executive Pascal Soriot, but he has not wasted any time in introducing new strategies and in particular aligning efforts behind the five identified growth drivers, one of which is oncology. For us, we have previously highlighted the importance of Brilinta to deliver significant growth and share current management's frustration at the delays to the US approval and the apparent complacency at launch which effectively resulted in a failed introduction to the US market.

Nevertheless, management has now put in place strategic efforts to increase awareness in both the speciality care and primary care settings. We look forward to learning what progress has been made here, hopefully during Astra's third quarter results which are scheduled to be released on the 31 October.